U.S. STRATEGIC INTERESTS & FOREIGN POLICY PRIORITIESIt is in U.S. interest to promote the transformation of Belarus from one of the world's "outposts of tyranny" into a democratic, peaceful and prosperous state. Considered to be the "last dictatorship in Europe," Belarus lacks the basic freedoms in public and political life and in the market place. This keeps it from fulfilling the potential of its educated population and its strategic importance as a transit route between Russia and an expanded NATO and European Union (EU). Belarus could contribute to and benefit from regional economic development and stability. However, the Belarusian government's (GOB) policies hinder progress and isolate the country from Europe and the international community. The U.S. Government (USG) actively promotes the development of democratic institutions, the rule of law, and a market economy in Belarus. The USG's foreign policy priority is robust democracy promotion with the goal of empowering the Belarusian people so that they may determine their own future. The USG works towards this goal in coordination with the EU, Belarus's neighbors, individual donor states, the Organization for Security and Cooperation in Europe (OSCE), and other international organizations.

FOREIGN ASSISTANCE PRIORITIES

The Belarusian regime's oppression has inspired many Belarusians to work for fundamental rights, freedoms, and opportunities. USG foreign assistance priorities are directed towards engaging and empowering those Belarusians who are working to: develop democracy and the rule of law through political and non-governmental institutions; strengthen and support the independent media, as a free flow of information is essential to educate the wider population; build stronger economic institutions and set the stage for long-term economic reform by better educating entrepreneurs and others on free-market business practices; and help relieve the pressure on Belarusian society caused by high national incidence of tuberculosis, trafficking in persons, and the lingering effects of the 1986 Chernobyl nuclear disaster.

OPERATING ENVIRONMENTIn the run-up to the March 2006 presidential election and thereafter, the authoritarian Belarusian regime stepped up its suppression of pro-democracy groups, alternative political voices, and sources of independent information. It committed election fraud and human rights abuses; and it created an increasingly hostile and restrictive operating environment for foreign assistance. The GOB denied NGOs' registration or re-registration and amended the criminal code to allow those who took part in the activities of an unregistered NGO or received foreign assistance to be prosecuted. While the presidential campaign and election illustrated the regime's repression, they also generated considerable momentum and increased unity of the country's democratic forces. Through a transparent, democratic process, the opposition nominated and supported a single candidate who proved effective in building a pro-democracy coalition and turning out credible support at the polls. This opposition momentum - as well as a five-day demonstration of thousands of protestors following the announcement of fraudulent election 'results' - demonstrated potential for democratic change in Belarus.

While the Belarusian economy has grown over the past several years, its growth is not sustainable. In 2006, as previously, the GOB undertook no structural reforms, including privatization. It de facto re-nationalized many enterprises. However, despite the heavy administrative burden the GOB placed on small enterprises, entrepreneurs' interest in developing small and medium-sized enterprises (SME) remained strong.

The GOB continued its campaign of anti-Western propaganda alleging evil motives behind USG and European assistance to pro-democracy forces. Other donors, including UNDP and OSCE, report major problems and delays in registering assistance projects, even in purely non-political fields. In addition, the regime specifically targeted USG and other assistance providers, especially those providing assistance to civil society. USG educational exchange programs and student travel were subjected to increased GOB interference as authorities prevented high schools students from participating.

COUNTRY PERFORMANCE MEASURES

Belarusian Democratic Reform

The "radar" or "spider web" graphs below illustrate Belarus's democratic performance during FY 2005. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2005 performance levels, while the two dark lines indicate how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and, (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 10 (August 2006). Found online at: http://inside.usaid.gov/EE/po/mcp.html.

The graph above shows Belarus's democratic reform scores in 2005* (the gray shaded area) as compared to the average of Romania's and Bulgaria's democratic reform scores in 2002 (the bold line) when they were invited to join NATO and receive favorable indications of future EU membership.

*Actual 2006 scores not yet available.

The graph above shows Belarus's democratic reform scores in 2005* (the gray shaded area) as compared to its democratic reform scores in 1999 (the bold line).

*Actual 2006 scores not yet available.

Belarusian Economic Reform

The "radar" or "spider web" graphs below illustrate Belarus's economic performance during 2005. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2005 performance levels, while the two dark line indicates how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 10 (August 2006). Found online at: http://inside.usaid.gov/EE/po/mcp.html.

The graph above shows Belarus's economic reform scores in 2005* (the gray shaded area) as compared to the average of Romania's and Bulgaria's economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2006 scores not yet available.

The graph above shows Belarus's economic reform scores in 2005* (the gray shaded area) as compared to its economic reform scores in 1999 (the bold line).

*Actual 2006 scores not yet available.

FY 2006 Country Program Performance

Governing Justly and Democratically

The authoritarian regime in Belarus is underpinned by a non-democratic 2004 referendum removing presidential terms limits and by the fraudulent 2006 presidential election. OSCE/ODIHR observers found that the presidential election failed to meet international standards and was characterized by a disregard for the basic rights of freedom of assembly, association, and expression, as well as by a climate of insecurity and fear and a highly problematic vote count. In the run-up to the election, the regime used arrests, detention, deregistration of organizations, and threats of job or education loss to intimidate people working to strengthen civil society, develop a transparent democratic process or participate in opposition politics. The regime also limited the free flow of information by controlling or restricting nearly all media outlets and arresting many opposition activists for passing out legal campaign materials. In the week following the election, the regime detained hundreds of demonstrators and beat, harassed, and/or prosecuted many opposition supporters.

Government restrictions on basic freedoms continued even in non-election periods. Pro-democracy activists, including opposition politicians, independent trade union leaders, youth and NGO leaders, and newspaper editors, were targets of oppression by the regime. Amendments to the criminal code enabled the authorities to press criminal charges carrying a prison sentence of up to two years for organizing or taking part in activities of a suspended or closed NGO. Authorities prosecuted civil society and NGO leaders and sent 16 activists, including an opposition presidential candidate, to prison for up to two years. The GOB was able to manipulate and pressure 80 percent of the work force due to the short-term contracts it requires for state employees. It also restricted freedom of religion and used the justice system as a tool of oppression.

In 2006, the regime increasingly restricted independent media through continued use of libel laws, restrictions on foreign funding, pressure on businesses not to advertise in independent papers, limitations on access to newsprint and printing presses, denial of access to the state subscription service and distribution networks, censorship, restrictions on the import of media-related materials, temporary and permanent suspension of independent and opposition periodicals, imposition of excessive fines, closing of newspapers, confiscation in quantity of printed publications, and detention of those distributing such material. The GOB continued to make use of its monopoly on television broadcasting to present biased news coverage and to minimize the presentation of opposing points of view. All Internet service providers in Belarus operated through a state-controlled portal. Authorities also took measures to increase control over Internet access in the universities. Requirements regarding legal residence further complicated the ability of independent media to operate legally.

U.S. ASSISTANCE PRIORITIES

In FY 2006, USG democratic reform assistance continued to engage diverse elements of Belarusian society to increase citizens' awareness and implementation of democratic practices. The priorities included helping to strengthen civil society and the NGO sector, increasing access to objective information through the Internet and strengthening independent print and broadcast media, building legal defense capacity and advocacy for the rule of law, and strengthening pro-democratic political process. The USG supported capacity-building and legal assistance for independent trade unions. USG-funded exchange programs reflected USG priorities and were tailored to familiarize Belarusian students and professionals with a democratic, market-based system.

DESCRIPTION OF PROGRAMS AND ACTIVITIESThe USG funded political process-strengthening activities to support the institutional growth of Belarusian democratic organizations and improve the political skills and outreach capabilities of pro-democratic forces. Activities also focused on local level political party development, including the establishment of local platforms for January 2007 elections. The USG funded external broadcasting into Belarus and provided support to permit media outlets to continue to provide Belarusian citizens with objective, unbiased information. USG-funded media support included financial and technical assistance to assist independent media organizations to start websites.

The USG promoted civil society development through technical and financial support to local civil society, media, and human rights NGOs. In addition, some USG-funded projects emphasized creating a more transparent legal and regulatory environment for civil society as a whole. A successful and well-received legal assistance project implemented by a USG-funded NGO closed in 2006 when the GOB refused to renew its registration. To promote development of local grassroots organizations, the USG funded training and direct grants to support specific civil society initiatives and funds a locally registered organization that provides grants and technical assistance.

USG assistance also supported providing Belarusian entrepreneurs, professionals, and NGO leaders with training opportunities in the U.S. Exposure to the U.S. developed their skills, demonstrated that the U.S. seeks to reverse Belarus's increasing self-isolation, and promoted mutual understanding.

OUTPUTS

USG support to strengthen political process helped the Democratic Forces to hold a successful congress attended by 800 delegates in Minsk in October 2005. Following that Congress, USG support facilitated an extensive program of meetings, consultations and trainings for political groups within the Democratic Forces. In the six months leading up to the March 2006 presidential election, 585 persons traveled to countries bordering Belarus for 83 various meetings, consultations, and trainings.

The USG funded a number of activities to strengthen democracy and civil society. As of October 2006, one USG-funded implementer leveraged USG funding to provide 51 grants in direct support of civil society in Belarus and 12 grants to link Belarusian civic groups with counterparts in neighboring countries. Another ensured that two thousand leaders from trade unions, NGOs, and independent media learned new methodology and best practices in over 1,300 consultations, training sessions, and seminars. The USG directly provided an additional 70 small grants and funded the travel of U.S. experts to Belarus to speak on a range of topics, including public interest law, women's empowerment and entrepreneurship, business education, and ecotourism. The USG also supported alumni of USG-sponsored programs to carry out projects of benefit to Belarusian society on topics as varied as gender equality, entrepreneurship and civic education. Finally, the USG funded five groups of over 50 Belarusians to take part in exchange visits to the U.S. on clinical legal education, preventing child abuse and neglect, and financial reporting and analysis for effective management. USG-funded programs to support independent media focused on strengthening the media's capacity to provide Belarusian citizens with objective, unbiased information. One of the most important of these initiatives was the establishment of the European Radio for Belarus (ERB), an independent station based in Poland. With European and U.S. support, ERB began broadcasting into Belarus from Poland and Ukraine. Launched in January 2006, ERB began to transmit via the internet 24 hours a day, and in several areas bordering Belarus, its radio broadcasts were beamed two or three times a day.ERB successfully concluded one subcontract with a Ukrainian radio station near the southern border of Belarus to broadcast ERB programming for two hours daily. Several cities and towns in Belarus are within range of these transmissions.In FY 2006, USG-funded projects to improve public administration included the launch of student legal clinics that provided practical training for law students and gave free legal consultations to the public. Belarusian lawyers and law students learned the theory and practice of clinical legal education thanks to two seminars and an internship in Russia. The USG supported holding a university-level moot court competition in Belarus in 2006. The winning university sent some students to the U.S. to compete in an international moot court competition.

European and USG funding supported the distance learning program and face-to-face programs of the European Humanities University (EHU), a Belarusian University in exile in Lithuania. The program serves about 780 students in Belarus and about 350 Belarusian students in Lithuania.

PROGRAM PERFORMANCE/IMPACT

The October 2005 Congress of Democratic Forces was a seminal event in Belarus's history. To prepare for it, Belarus's disparate democratic opposition formed a loose union that allowed the parties to reach out to NGOs, trade unions, and citizens to identify and invite delegates to the Congress from all levels of Belarusian society. The Congress approved a broad-based, consolidated political platform; chose one election team, and selected a single opposition presidential candidate. The Congress's selection of a unified presidential candidate and democratic message was a critically important accomplishment that stands in stark contrast to a decade of internal disarray among opposition elements. After the congress, the unified democratic opposition conducted activities that raised the nationwide name recognition of the opposition candidate from 5% before the congress to nearly 100% just prior to the elections. A group of local NGOs recruited 1,500 people who collected 15,000 signatures to nominate people for specific election commissions for the 2006 presidential elections, thus increasing the public's pro-democracy political participation. In the fall of 2006, local democratic opposition forces took a number of steps to prepare for local elections in January 2007. These steps in some cases included identifying local united opposition candidates and campaigning door-to-door. Many candidates reported that unlike in the period before the March 2006 presidential election, Belarusians with whom they engaged before the local elections were much more aware of and opposed to the regime's political and economic repression.

Throughout 2006 civil society activists improved their skills. They also learned how to communicate more efficiently and securely over computers and telephones, thus increasing the security of their communications. They began to share information, integrate where possible and to organize into a network. Trade union activists became more involved in their communities, and as a result, 100 opposition union workers ran for seats in the 2007 local election. While GOB intimidation and monitoring increased following the 2006 Presidential election, youth groups continued to advocate for government change by publishing and distributing leaflets.

USG-funded grants to domestic independent newspapers allowed the few remaining independent papers to withstand the substantial pressure from the GOB and print and distribute copies prior to and after the Presidential election. While the GOB confiscated some print runs prior to distribution, some newspapers made it to the public, and thus gave some Belarusians access to independent information. Most independent newspapers moved to set up Internet addresses where they can publish on the web if their newspaper is closed by the government. While still in its nascent phase, the ERB both on line and over the radio waves provided another source of independent information to a small but growing, loyal audience.

Many of the participants in U.S. exchange programs started projects or practices in their communities, companies, or institutions. To do this, they drew directly on the knowledge and experience they received in the U.S.

MEASURES OF PROGRAM EFFECTIVENESSIn order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers can better understand whether or not assistance programs are having the intended impact.

Please find below two important indicators in the area of Governing Justly and Democratically. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.

Performance Indicator:Civil Society Index. Assesses the growth of nongovernmental organizations (NGOs), their organizational capacity and financial sustainability, and the legal and political environment in which they function; the development of free trade unions; and interest group participation in the policy process. (7-point scale: 1 indicates a very advanced NGO sector, 7 indicates a weak NGO sector) The data upon which this ranking is based comes from the previous calendar year. Source: Freedom House, Nations in Transit 2006. Found online at http://www.freedomhouse.org/research/nattransit.htm.

CY 2002 Baseline

CY 2005 Rank

CY 2006 Rank

CY 2007 Target

6.25

6.75

6.75

6.75

Impact of U.S. Assistance on the Above Indicator: This indicator remained dismal, but stable during 2005. Because it captures the previous calendar year, the 2006 ranking does not yet include the new wave of political pressure on civil society unleashed before and after the March 2006 presidential election. Amendments to the Criminal Code permitted the government to prosecute unregistered civic initiatives and imprison their leaders. Nearly all human rights and advocacy NGOs and resource centers were closed down. New requirements for legal registration and continued harassment of NGOs resulted in an even more difficult operating environment and fewer registered independent entities. Foreign aid was further hampered by restrictive legislation. Despite all this pressure, USG funding provided NGOs with a lifeline for survival and development and helped sustain civil society activities and information dissemination.

Performance Indicator: Independent Media Rating, drawing from Freedom House, Nations in Transit 2006 as adapted by "Monitoring Country Progress in Eastern Europe and Eurasia" USAID/E&E/PO, No. 10 (August 2006). The Freedom House rating addresses the current state of press freedom, including libel laws, harassment of journalists, editorial independence, the emergency of a financially viable private press, and Internet access for private citizens. 1=highest, 7=lowest. The data upon which this ranking is based comes from the previous calendar year. Found online at http://www.usaid.gov/locations/europe_eurasia/country_progress/index.html.

CY 2002 Baseline

CY 2005 Rank

CY 2006 Rank

CY 2007 Target

6.75

6.75

6.75

6.75

Impact of U.S. Assistance on the Above Indicator: This indicator remained bleak, but stable during 2005. Because it captures the previous calendar year, the 2006 ranking does not yet include the substantial GOB pressure on media in the period before and after the March 2006 presidential election. Because of the increased GOB intimidation and legal roadblocks, it is clear that media freedom regressed in FY 2006. USG assistance to independent media effectively kept 10 to 15 small newspapers open in FY 2006. Some larger newspapers were forced to close or were inhibited by new legal rules designed to prevent newspaper distribution. GOB measures included forbidding the post office to deliver and government kiosks to sell certain independent newspapers.

Economic Growth

In 2006 the GOB perpetuated its retrograde economic policies and maintained close relations with rogue states. The dependence of Belarus's fragile economy on Russian largesse continued to jeopardize Belarus's economic and political stability. While Russia continued to provide Belarus with natural gas and crude oil at sharply discounted prices, the Government of Russia announced that it intended to raise gas prices significantly as Russia prepares to join the WTO. Inflation in Belarus slowed to about eight percent. The Belarusian ruble appreciated less than one percent. While technically convertible, the Belarusian ruble remained unavailable in most international currency markets, a fact which attests to its weakness. Both imports and exports increased, although the trade deficit grew. As the Russian market became more competitive, Belarusian exports to Russia weakened.

The GOB maintained a socialist command economy, with around 80% of business under government control. Roughly one million people are employed in the private sector. Excessive levels of government regulations that stifle entrepreneurship include: burdensome taxes on small businesses and individual entrepreneurs, frequent government inspections, and constantly changing laws -- sometimes applied retroactively. In 2006, the GOB did not engage in any structural reform, but made some improvements in line with World Bank and IMF recommendations. Also, in dialogue with the international donor organizations and local business associations, the GOB removed some barriers to SME creation and functioning. According to official estimates, one-quarter of state businesses were unprofitable, as was much of the agricultural sector. To remove bankrupt collective farms from the state's books, the GOB forced profitable state and private companies to "adopt" these farms. The GOB remained reluctant to privatize state enterprises; when it did open up such companies for investment, it insisted on maintaining a controlling share.

U.S. ASSISTANCE PRIORITIESPriorities for USG assistance to promote economic growth included improving the local capacity to advocate for market reforms, promoting dissemination of accurate economic information, stimulating continued public dialogue, and increasing the public's understanding of economic policy and reform topics specific to Belarus. USG assistance sought to help local business associations become an effective force advocating for further liberalization of economy. USG assistance also built on existing local think tank and independent research institution capacity to analyze economic data and trends, highlight the weaknesses of government economic policy, and generate alternative economic programs and platforms. While this assistance promoted market economy, it also targeted democratic change.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

The USG supported providing unbiased economic information in Belarus through economic education and accounting training for businesses, civil society, academia, and government officials. The USG funded activities to provide professionals and Belarus's public with access to information on what can be done to improve Belarus's long-term economic growth. USG assistance helped to bring financial reporting in Belarus into compliance with international standards and supported policy dialogue and institutional capacity-building.

In the area of agricultural development, USG assistance helped to increase farmers' income by improving the performance of privatized collective farms throughout Belarus. American volunteers conducted training sessions and consultations at selected private farms to enhance their capacity for increased income-generation, promote modern production practices, and transfer technical knowledge and business management skills.

The USG also supported business education, including curriculum development, professional associations, conferences, and improving professional capacity. USG support for local economic development, included rural tourism, housing reform, ecological initiatives, credit unions, and introducing innovative business models in rural areas.

OUTPUTS

In 2006, USG support for economic education and policy dialogue continued to provide private and public sector economists, managers, professors, other professionals and journalists with a forum to discuss Belarus's economic development. Local think tanks and independent economists presented and debated their findings at conferences and workshops and disseminated the results of their work to a wider circle of professionals and the public at large through publications and the Internet. Topics included: Belarus's export potential, challenges of WTO accession, privatization, barriers and opportunities for SMEs, attracting foreign direct investment, effective management of public finance, and pension reform.

The USG also continued to train professionals, mostly from the private sector, for the Certified Accounting Practitioner/Certified International Professional Accountant (CAP/CIPA) Russian-language professional accountancy certification program. Around 1500 professionals were trained in financialaccounting, managerial accounting, tax, and law. Of the 1300 people in eight cities across Belarus who took CAP/CIPA exams, roughly half passed. In addition, 130 people were trained as trainers to ensure further information dissemination. Thanks to USG support, a leading local research institution developed CAP/CIPA infrastructure. The CAP/CIPA program became financially self-sustaining and started to offer most of its services on a commercial basis. Because of USG capacity-building assistance, the Belarusian Association of Accountants and Auditors became a full member of the Eurasian Council of Certified Accountants and Auditors.

Sixteen USG-supported volunteers provided technical assistance to ten host organizations, including six privatized collective farms, two informal groups of individual private farmers, and two groups of private entrepreneurs. Supplemental USG funding allowed local organizations to meet the increased demand for assistance by doubling the amount of volunteer technical assistance in the areas of livestock, crop production, marketing, and business planning. In addition, USG assistance supported informal groups of individual private farmers and rural entrepreneurs engaged in small-scale commercial agriculture outside of the government-controlled supply and marketing structures.

PROGRAM PERFORMANCE/IMPACTThe International Finance Corporation 2006 Doing Business report characterizes Belarus's business climate as unfavorable, as business activities are hampered by complex, time-consuming, and costly bureaucracy. However, USG-supported business associations improved dialogue with the GOB. As a result, the GOB adopted a program of state support to SMEs to improve SME access to credit, simplify taxation, and develop information resources.

USG-supported business education and policy dialogue were well received and attended by the business community, independent think tanks, and GOB economists and officials. This assistance disseminated western economic thought so that a future, democratic Belarus will be well-equipped with professionals educated in economic theory and best practices.

USG-supported accounting programs trained and certified was more than double the number of the professionals planned. A majority of the 150 participants of the CAP/CIPA program who took part in a random poll stated that they had improved their firms' financial management thanks to the program and that their companies were at the beginning stage of adopting international financial reporting standards. Seventy-five percent of those polled were convinced that adopting international financial reporting standards would improve their enterprises' competitive advantage and improve the productivity and profitability of their businesses.Ten years of USG financial and technical assistance to the Institute of Business and Management Technologies at Belarus State University allowed the joint Belarusian-American MBA program to become self-financing. Consequently USG support has been available to help establish MBA programs in several other local universities and at the Belarus Association of Business Education. More than 200 MBA alumni gathered at the tenth anniversary celebration of business education in Belarus.

MEASURES OF PROGRAM EFFECTIVENESSIn order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers can better understand whether or not assistance programs are having the intended impact.

Please find below two important indicators in the area of Economic Growth. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.

Performance Indicator: Private Sector Share of GDP, Drawing from European Bank for Reconstruction and Development, Transition Report 2005 as found in, "Monitoring Country Progress in Eastern Europe and Eurasia" USAID/E&E/PO, #10 August 2006. The data upon which this ranking is based comes from the previous calendar year.Found online at http://www.usaid.gov/locations/europe_eurasia/country_progress/index.html.

CY 2002 Baseline

CY 2005 Percentage

CY 2006 Percentage

CY 2007 Target

25%

25%

25%

25%

Impact of U.S. Assistance on the Above Indicator: This indicator remained stable. Although the GOB did not engage in any structural reform, it made improvements in the banking sector in line with World Bank and IMF recommendations. It also removed some barriers to SME creation and functioning. The GOB attitude to private business is gradually changing, and SME share in GDP by 2010 is projected to grow to 20-22%, in contrast to the meager 8.5% in 2005. The USG supported advocacy to remove some of the barriers to private business development. The Program of State Support to SMEs, adopted in 2006 by the Council of Ministers, included access to credit, simplified taxation, etc. If implemented, these measures may result in increasing the share of SMEs in the private sector in CY 2007.

Performance Indicator: Economic Reform Index. USAID/EE/PO, Monitoring Country Progress in Central and Eastern Europe & Eurasia, drawing from EBRD Transition Report 2005, scores range from 1 to 5, with 5 being the most advanced. EBRD Economic Reform Index includes components on small-scale and large-scale privatization; trade liberalization; price liberalization; corporate governance; competition policy; banking; and non-banking financial reforms. The data upon which this ranking is based comes from the previous calendar year. Found online at http://www.usaid.gov/locations/europe_eurasia/country_progress/index.html.

CY 2004 Baseline

CY2006 Target

CY 2006 Rank

CY 2007 Target

1.81

1.9

1.81

2.0

Impact of U.S. Assistance on the Above Indicator: This indicator declined slightly in CY 2005. The USG does not have any significant assistance programs that influence macroeconomic reform. The GOB introduced no major macroeconomic reforms in FY 2006. It did not embark on significant privatization, but instead increased state control of many enterprises. It also did not liberalize prices or trade.

Investing in People

Poverty was acute in Belarus. Twenty-seven percent of the population lived below the official poverty line; families with children were most affected. Belarusian fertility rates continued to decline while mortality rates continued to rise. The average life expectancy was 69 years (63 for men, 75 for women). Fertility rates were lowered by poor reproductive health, including the high level of sexually transmitted diseases among youth, the high number of births among teenage women, and one of the highest abortion rates in Europe and Eurasia. Belarus's mortality rates are elevated by chronic health concerns, including heavy drinking, cardiovascular and other chronic diseases, and cancer, especially in Chernobyl-contaminated regions. Although HIV/AIDS is largely confined to high-risk groups, the epidemic is expected to grow. The tuberculosis (TB) epidemic continues in Belarus, exacerbated by HIV/TB co-infection and multi-drug resistant TB. The deterioration of living standards caused domestic violence, substance abuse, juvenile delinquency, and the number of abandoned children to grow. There were 32,000 orphans in Belarus, 86% of whom had been abandoned by their families.

The GOB response to these challenges was inconsistent. The GOB government launched state-sponsored programs for vulnerable groups, but its welfare and healthcare systems are oversized and inefficient.

U.S. ASSISTANCE PRIORITIES

The USG demonstrated its concern for the people of Belarus by funding health and social programs. The GOB's failure to introduce reform has resulted in the growing number of social and health problems in Belarus. USG assistance not only improves the demographic, social and health situation per se, but also demonstrates the advantages of democratic practices as these projects also promote the active role of the civil society. Priorities include: assistance in prevention of HIV/AIDS, treatment of TB, prevention of institutionalization of children, prevention of human trafficking, and improving the health of the population of Chernobyl affected areas. Training and capacity-building of local social service providers also promotes the networking and cooperation between different sectors of the society. Despite their humanitarian character, USG projects experienced some difficulties in obtaining formal GOB approvals or registration.

To assist orphans and vulnerable children, USG-supported implementers worked with families, community service providers, social workers, and institutionalized children to reduce the number of children in institutions and increase the number of those who return to their natural families or alternative family care. In the field of anti-trafficking, the USG began funding a two-year project to increase awareness among vulnerable groups and provide job skills training followed by an internship program to about 1000 at-risk women and actual victims of trafficking. This project is the only project targeting one of the underlying causes of trafficking: poverty and the lack of job opportunities.

USG support to promote family health in the Chernobyl-affected regions of Belarus aimed to establish a sustainable framework and mechanisms for the radiological education of healthcare professionals, pregnant women and future fathers, nursing mothers, women of reproductive age, secondary school teachers and schoolchildren.

OUTPUTS

To improve community services to groups at risk of HIV/AIDS, the USG strengthened the capacity of local NGOs and community groups to deliver effective HIV/AIDS program services and educate the general public through training, micro-grants and awareness campaigns. In 2006, the USG supported 45 workshops for about 600 participants representing 52 organizations, funded national training of teams of trainers who in turn conducted training in seven communities, and supported the establishment of 17 new HIV/AIDS services which benefited 21,700 people. The USG also supported 16 new NGO-to-NGO and NGO-GOB joint activities, including a national NGO campaign dedicated to International Candlelight Memorial Day, meetings of the Belarusian AIDS Network, the Belarusian AIDS Network bulletin, and seven local partner projects. With USG support, 13 local HIV/AIDS NGOs took part in three in-country exchange visits.

To assist orphans and vulnerable children in three targeted communities, the USG conducted train-the-trainer programs for roughly 100 community specialists from 19 partner organizations in 11 subjects: parenting skills enhancement, health education and substance abuse prevention, youth mobilization and volunteer management, life skills education, and child protection services. Community-based services such as centers for social protection, schools, child protection bodies, and local and national NGOs took part in the trainings. Over 80% reported improving their knowledge, skills, attitudes and ability to deliver innovative services for families and children. Overall, 155 parents and over 200 children, including the disabled, benefited from the new prevention services for parents and children in targeted communities. The USG also funded small grants for community-based organizations and national/local NGOs as well as new equipment for the 12 poorest community-based service providers. In all three targeted communities, USG-supported entities closely cooperated with the local authorities, schools and child protection institutions.

In an effort to fight trafficking in persons and its effects, the USG supported reintegration and counseling assistance to 80 victims of trafficking. In 2006, the USG supported 330 lectures for over 8,700 people to raise the participants' awareness of risks of trafficking. A series of job skills training followed by internships have produced some immediate results: out of 463 vulnerable individuals who have completed their internships, 228 (49.2%), have gotten permanent jobs. To implement these projects, the USG provided technical assistance to sixteen NGOs PROGRAM PERFORMANCE/IMPACT

The Government of Belarus began to acknowledge the importance of preventing HIV/AIDS and trafficking in persons and started to seek solutions more actively. These changing attitudes were evident during the December 2006 open parliamentary hearing on GOB HIV/AIDS prevention policy. The hearing was attended by UN and UNICEF representatives in Belarus, GOB ministers, and NGO leaders. Parliament resolved to increase Belarus's participation in international drives and measures against the spread of AIDS and launched anti-discriminatory legislation to protect the rights of HIV-positive people in employment, education, housing and other areas. Increased GOB cooperation in fighting HIV/AIDS was also clear in the strong implementation of the first phase of the grant from the Global Fund to Fight AIDS, Tuberculosis and Malaria. During the first phase, which USG assistance supported strongly, 58 counseling centers were established about 9,000 people. The GOB has provided access to 29 prisons for HIV/AIDS interventions. As a result of first phase assistance, the GOB also was able to introduce anti-retroviral treatment, and 88.2% of infected pregnant women were receiving a complete course of anti-retroviral prophylaxis. First phase assistance also supported launching a wide preventive campaign and 1,800 people were trained for HIV/AIDS preventive work with youth. Following the successful implementation of the first phase of the grant, the Global Fund approved the GOB's application for the second phase of the grant for HIV/AIDS treatment and prevention.

USG assistance stressed the well-being of children as a priority and supported measures to protect families. Although GOB laws and regulations disincentivized child protection by, for example, penalizing parents who could not afford government care for their at-risk children, child protection specialists were receptive to adopting U.S. standards, procedures, and methodologies. This cooperation produced the first draft of a procedure for removal of a child from a family in order to avoid groundless and subjective decisions by Government officials.

Belarus does not fully comply with the minimum standards for the elimination of trafficking; however, it is making significant efforts to do so. The government adopted amendments to its criminal code to enhance its anti-trafficking enforcement framework and improve victim protection in 2005. The GOB also cooperated in combating trafficking in 2006 by hosting a number of significant international events bringing together international organizations, GOB officials, the NGO community, and high-level officials including law enforcement.

MEASURES OF PROGRAM EFFECTIVENESSIn order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.

Please find below two important indicators in the area of Investing in People. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.

Performance Indicator: Human Capital Index. Six primary indicators are used to track human capital: per capita income; secondary school enrollment; under five mortality rates; life expectancy; public expenditure in health; and public expenditure in education. These six indicators are used to create an overall human capital index where 1 is lowest and 5 is highest. Source: World Bank and UNICEF, as adapted by "Monitoring Country Progress in Eastern Europe and Eurasia" USAID/E&E/PO, No. 10 March 2006. The data upon which this ranking is based comes from the previous calendar year. Found online at http://www.usaid.gov/locations/europe_eurasia/country_progress/index.html.

CY 2002 Baseline

CY 2005 Target

CY 2006 Rank

CY 2007 Target

3.6

3.6

3.6

3.6

Impact of U.S. Assistance on the Above Indicator: This indicator remained stable in CY 2005. Positive factors balanced negative developments. Belarus has a highly educated and skilled workforce, but much of the population lives below the poverty line. The birth rate is on the decline, and annual mortality has increased. HIV/AIDS and TB are on the rise. However, due to positive external economic factors, the gob was able to increase wages and pensions. Although USG projects in the social area did not yield significant national-level impact in CY 2005, the GOB's increased cooperation in prevention and treatment of HIV/AIDS and prevention of trafficking in persons bode well for future progress.

Performance Indicator: Global Trafficking in Persons Report country rankings. Tier 1 countries are those whose governments fully comply with the minimum standards of the Trafficking Victims Protection Act of 2000. Tier 2 countries are those whose governments do not fully comply with the Act's minimum standards but are making significant efforts to bring themselves into compliance with those standards. Tier 3 countries are those countries whose governments do not fully comply with the minimum standards and are not making significant efforts to do so. The data upon which this ranking is based comes from the previous calendar year. Source: U.S. State Department Global Trafficking in Persons Annual Report. Found online at http://www.state.gov/j/tip/rls/tiprpt/.

CY 2002 Baseline

CY 2005 Rank

CY 2006 Rank

CY 2007 Target

2

2

2

2

Impact of U.S. Assistance on the Above Indicator: This target remained stable. USG assistance supported trafficking awareness promotion and services and job skills training for at risk populations. The events held in Belarus at a national level and legislative initiatives are preliminary but important steps to raising consciousness on TIP issues and building more practical cooperation in this area. However, the USG does not expect the impact of these activities to be significant enough to allow Belarus to comply with minimum standards in CY 2007. Thus the target is the same.

Peace and Security

U.S. ASSISTANCE PRIORITIESDue to continued concerns about the lack of human rights and democracy in Belarus, the USG did not provide bilateral law enforcement or security assistance to Belarus in FY 2006. The USG also did not fund assistance projects for Belarusian former WMD scientists. The USG and Belarus are, however, cooperating to enhance the safety and security of nuclear materials in Belarus. The USG also supported a multilateral project to provide anti-trafficking training to Belarusian law enforcement officials. Belarus participated in some NATO "In the Spirit of Partnership for Peace" programs, and eight military officers and civilians attended Marshall Center programs and conferences to promote military reform and civilian control of the military.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

Cooperation with Belarus to upgrade security at nuclear research facilities is ongoing. The USG Is working with the International Science and Technology Center and others to ensure the security of Belarus's fissile material stockpiles. The USG is also cooperating with the Russian government under the Global Threat Reduction Initiative (GTRI) to exchange Belarus's Soviet-legacy stockpiles of highly enriched uranium for an equivalent amount of low enriched uranium. Efforts to do so will continue in 2007.

OUTPUTS

USG non-proliferation and other security programs focus on stimulating dialogue between scientific and other experts. GOB interest in cooperating in these areas was not high.

PROGRAM PERFORMANCE/IMPACTGOB interest levels did not match those of the USG, and thus impact was minimal in FY 2006.

Humanitarian Assistance

There were many vulnerable people in Belarus given high poverty rates, unreformed health care and social services, and the lasting effects of the Chornobyl nuclear disaster. Occurrences of radiation-related cancers and other diseases remained extremely high; some studies indicate that the residual effects of Chornobyl will be felt in Belarus for the next 50 years. Stocks of many vital pharmaceuticals remain very low. There are very few opportunities for medical professionals to receive advanced medical training.

U.S. ASSISTANCE PRIORITIESHumanitarian programs in Belarus continued to focus on improving the daily lives of the most vulnerable, often institutionalized, persons living in remote areas without even the most basic of necessities. The provision of medicines, clothing and adequate shelter remains the top priority for humanitarian efforts. The USG gave particular attention to the large number of people affected by the Chornobyl disaster and placed an emphasis on the provision of anti-cancer medicines. The USG also worked to bolster local and USG disaster and crisis response capability.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

The primary focus of USG humanitarian assistance is the distribution of humanitarian commodities, for which need has been verified, to vulnerable persons beyond the reach of other USG assistance programs and Government of Belarus social welfare spending. For FY 2006, the USG-funded humanitarian activities in Belarus included an-ongoing commodity distribution project, a children's cardiac surgery clinical services and training project, a citizen-to-citizen humanitarian project and a Chernobyl commemorative medical airlift.

In addition to the above activities, the USG provided free shipping to any registered U.S. charitable organization that wished to send humanitarian commodities to local partners in Belarus.

OUTPUTS

In FY 2006, the humanitarian program delivered 45 surface containers and 1 airlift of various humanitarian commodities valued at a total of $10.68 million. The cost to transport, distribute and monitor these commodities was just over $0.6 million. Commodities delivered included, medicines, medical supplies, shelter items, clothing, shoes, food, blankets, linens, hygiene kits and school supplies. These figures include delivery, distribution and monitoring support for 18 surface containers of items donated by five U.S. charitable organizations, as well as an April airlift of $4.9 million in medical relief supplies in commemoration of the Chornobyl disaster. Continuing support for a Minsk Boarding Home for the Mentally Disabled provided cold weather clothing, linens and personal hygiene items to 160 permanent residents.

PROGRAM PERFORMANCE/IMPACTHumanitarian programs, while significantly impacting the day-to-day lives of recipients, are not designed to have long lasting impacts on recipient countries; however, some aspects of these programs assist in sustainable development. The USG-funded pediatric cardiac surgery clinical services and training program improved the level of care for children born in Belarus with congenital heart defects. U.S. surgeons performed diagnosis, surgical procedures and post-operative care to children with heart defects and provided intense clinical training Belarusian surgeons on the latest children's cardiac care techniques.

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